Heading into another vote of confidence next week, France now unexpectedly finds itself unfavorably compared to Italy, a country previously renowned for political upheaval and economic frailty.
Continued fighting between France’s main political parties and unresolved arguments over the 2026 budget, as well as a revolving door of failed prime ministers in the last couple of years, have led economists to ask: “Is France the new Italy?”
“The fiscal outlook for France is worse than that of Italy, at present” Nomura’s European research analysts said in a Tuesday note.
France’s debt pile amounted to 113% of its GDP in 2024, while Italy’s was 135% — but the tables turned when it came to considering the countries’ deficit over that period. On that metric, Italy’s deficit came to 3.4% of its gross domestic product (GDP), whereas France’s was 5.8% of its GDP.
French Prime Minister Francois Bayrou last week called a confidence vote for Sept. 8, as he seeks to pass a contentious 2026 budget containing around 44 billion euros ($51.3 billion) in cuts. The aim is to bring France’s budget deficit down to 4.6% in 2026, a level still well above EU deficit rules.
